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Reindeer, I've learned from someone else's experience that as PoA OR executor of an estate, you personally, are never in charge of a person's former debt. That's lucky enough to know. I feel that the creditors are just going to take a loss. There's nothing anybody can do. The accounts are closed for non-payment, not because we closed them out ourselves, hence why I said they were "charged off", even thought they still hassle my grandma over what she owes.
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I've been in your shoes (still am, actually). I'm all too familiar with the "robbing Peter to pay Paul" trap that some elderly find themselves in with credit cards.
First, make certain that all of the credit card debt is unsecured (though it sounds like your grandmother has no property at risk if the foreclosed house was her only asset).
Then, remind yourself that the companies that gave her the credit cards were taking advantage of the craziness in financial de-regulation that allowed companies to essentially make money by extending credit to people who couldn't pay them back. Your grandmother was just a pawn. Not too many years ago, she likely would never have been able to charge up any significant amount. People living solely on a very limited income would not have qualified for credit cards.
If your grandmother has stopped paying on them (if she hasn't, I would), the credit card companies probably have already "sold" the debt to another company (again, more financial shenanigans!). They'll keep sending "offers" to collect less than the amount owed (which, due to fees and interest, is probably many, many times what was actually actually charged on the card). Most won't sue, just threaten. Some may, though. I've accompanied a family member to court over exactly this. They didn't have any money to speak of and needed every penny (and then some) of their SS check just to make ends meet each month. While it's never the best situation to enter a court room without representation, it worked out well for us. There are loads of these companies that buy up debt with often nothing more than a spread sheet print-out to prove they own it. I did a little google research beforehand. The judges seem to be fed up with these cases clogging their courtrooms. The judge in our case lectured the attorney about having no evidence to support that his client was legally entitled to collect on the debt. It never went further than that. The company could have appealed, but instead, a few months later, we received notice that they'd forgiven the debt. Prior to entering the courtroom though, the lawyer asked to meet with us privately. He offered a rock-bottom offer to settle the debt. I had come prepared with a spread sheet showing my relative's income and expenses and told him that there's just nothing there to collect.
It's a smarmy business. The advice I'd give from my experience is, change your grandmother's phone number (they call relentlessly), carefully watch for court summons in the mail (you don't want her to be found in contempt if one of them does sue - that's real stuff), and help her get control of her finances. I now pay all the bills and he's saved about $70 a month in avoiding the bounced check fees alone!
Good luck!
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All of these are good answers, but if you have had POA for awhile, it may go against you if you knew your grandmother was charging things while she had dementia and you didn't try to stop it (not saying you didn't, this is just hypothetical). Also, if she has major debts and creditors galore, when she passes, the first three creditors get paid in this order: the funeral director, the attorneys who handle the estate, and the IRS. The rest of the creditors may have to just take a loss.
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If the credit cards issued a true discharge of debt they generally report this as a loss to the IRS, and it usually goes against the person as income for the year the credit card reports this. If all you did was close the accounts so she could not use them, then the estate will still owe the debt. However, they generally line up to be paid , the one who is owed the most, generally collects first and then so on. I do believe the estate can declare bankruptcy, and generally credit card debt is unsecured. It cannot always be collected if the estate is broke. Do not let them hassle you as POA and tell you that the debt is now yours to pay. It is not, the only case it would be is if you were a co-holder on one of the credit cards.
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Auntkiki, Contact the IRS about an offer in compromise. Basically, if a person does not have enough assets to pay a Federal tax obligation, IRS considers a person's assets, income and expenses and determines what they are willing to accept as a pay off.
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For those who asked about "What is my grandmother buying?" This has just been years of debt adding up. It's not within a year. This was like 10 years ago and now she just doesn't have the money to pay the bills anymore. It's nothing recent which makes it even more difficult. Imagine being a kid, thinking everything is okay while meanwhile your parent was paying bills with credit cards and paying credit cards with credit cards, and now that you're old enough to realize what's going on, it's like getting smacked with a brick wall and trying to dig your way through it with a spoon.


2nd chance checking accounts are not an option. She foreclosed on a house THIS year. That's worse than bankruptcy.

Currently, I am not aware if she owes the government. Also, she gets her social security directly deposited so I do not think I can be appointed a 2nd person on the check, if you know what I mean... Eventually, I will consider this an option JUST in case.

Ah..it's difficult trying to get my legal issues in order, but all this new found paperwork should help.. I'm PoA agent, AND Estate Executor. [Which is even MORE important to figure out this credit mess before hand!] Is the estate expected to pay back credit card bills after the cards have already been charged off (closed out)?

What if the estate doesn't have enough to pay them all? (I think the creditors will be SOL is that happened! Hahahahahha)
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I have the same problem with my mom. She has so many credit card bills it isn't funny. I now have POA and have been trying to resolve this. She has dementia so she can't handle he bills I also have Rep. Payee of he SS check. I am glad to know the credit card company can't get her ss check but I know they can put a levy on your SS check if you owe gov. She owed back federal taxes and they are now taking 13% of her check till it is payed off. I didn't know she owed these tax until got a letter a few months ago saying they are putting a levy on her check. I guess there is nothing I can do about it now.
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There are places that offer "second chance checking" see if there is a "Greentree Bank" in your area, google "second chance checking" they will allow you to open an account.
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No. If a creditor other than the federal government tries to garnish your Social Security benefits, inform them that such an action violates Section 207 of the Social Security Act (42 U.S.C. 407).

Section 207 bars garnishment of your benefits. It can also be used as a defense if your benefits are incorrectly garnished. Our responsibility for protecting benefits against garnishment, assignments and other legal processes usually ends when the beneficiary is paid. However, once paid, benefits continue to be protected under section 207 of Act as long as they are identifiable as Social Security benefits.
This is from the government site. Hope it helps. Write a letter to the credit card companies stating your grandmother has dementia, and only has social security and does not have the income to pay and is judgement proof and also state that they are not allowed to call. (or change her number)
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I'm glad that you found the POA. I would write all of the credit card companies explaining the situation, who you are as her POA and enclose a copy of the POA for they are going to want to see that. Also, I would take a copy of the POA to the bank.
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If she's demented she can't sign a new one, so use the old one. Creditors can sue anybody they want to sue, but if she doesn't have any money it's not worth their while. Just start by calling the credit card companies. Shut a couple of the cards down. What is she buying? You can stop that.
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Yes, I actually found a durable power of attorney signing me as an agent in her paperwork dated back for 2007. Granted, it needs to be updates with a few addresses, but it's still a legal & notarized document.

These answers make the most sense so far, and I suppose I can ask a lawyer about it.
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Do you have durable POA for your grandmother? She sounds to me like she is no longer capable of handling her business in a businesslike manner.
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Has your grandmother dementia? Then this could be argued as a defence, that she was not of sound mind when using the credit cards.

If she is on social security, and this is her only source of income, then I doubt it very much if they can touch her income. Dementia plus solely dependent on social security, your grandmother has a strong case.

Why not ask around to see if some lawyers are willing to do a pro bono case for your grandmother? (pro bono, you don't have to pay.)
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